Why bother making your company a great place to work?

Apart from the feel-good factor, is there any business value in being a good company to work for?

The Great Place to Work Institute has shown that the best companies to work for consistently outperform their competitors. Here are some of their stats to back that up:

  • Best Companies perform three times better than the general market.
  • Great Workplaces provides four times the return.
  • Best Companies experience as much as 50% less turnover.

They say:

Case studies of specific workplaces demonstrate additional, industry-specific benefits, including reduced shrinkage, improved track records on safety, higher patient satisfaction, better quality job applicants, and more.

One company, Baird, are even classing their company culture as a profit center, and that is because Baird’s efforts at developing and protecting its culture has resulted in recruiting better talent, stronger client relationships, resilient employees, and sustained revenue.

Another new study has shown that:

Companies listed in the “100 Best Companies to Work For in America” generated 2.4-3.7% a year higher stock returns than their peers from 1984-2009. These results are robust to controlling for risk, firm characteristics, and industry performance, and the removal of outliers. They have three main implications. First, consistent with human relations theories, job satisfaction is positively correlated with firm value and need not represent managerial slack. Second, corporate social responsibility can improve stock returns.

Food for thought, heh?